Free cars for energy hogs

FILE - In this June 22, 2012 file photo, Tesla CEO Elon Musk waves during a rally at the Tesla factory in Fremont, Calif. Musk on Monday, Aug. 12, 2013 unveiled a concept for a transport system he says would make the nearly 400-mile trip in half the time it takes an airplane. The "Hyperloop" system would use a large tube. Inside, capsules would float on air, traveling at over 700 miles per hour. (AP Photo/Paul Sakuma, File)
— AP

FILE - In this June 22, 2012 file photo, Tesla CEO Elon Musk waves during a rally at the Tesla factory in Fremont, Calif. Musk on Monday, Aug. 12, 2013 unveiled a concept for a transport system he says would make the nearly 400-mile trip in half the time it takes an airplane. The "Hyperloop" system would use a large tube. Inside, capsules would float on air, traveling at over 700 miles per hour. (AP Photo/Paul Sakuma, File)
/ AP

In their zeal to save the planet, California’s leaders have tapped utility consumers to give free electric cars to energy hogs.

I pay fairly close attention to public policy, so it’s no surprise that taxpayers subsidize a long list of green initiatives in the cause of fighting global warming, ranging from Warren Buffett’s latest solar power venture in Nevada to panel manufacturers controlled by China’s government.

The idea is that cutting carbon emissions will slow global warming, and that incentives are necessary to jump-start new industries that could eventually displace fossil fuels.

But the revelation that I’m also buying cars for my richer neighbors was, well, a bit shocking.

Recently, over coffee with a rich guy, I asked him how he liked his Chevy Volt. He loved it, particularly because it was free.

Under California’s tiered residential rates, which impose escalating costs as consumption rises, his power bill used to be $1,000 a month.

My bill is a miserly $50 a month or so. He has a big house, pool pump, landscape lighting … you get the drift.

When he bought his Volt, he became qualified for “EV TOU,” special time-of-use rates for electric vehicles that were put in place in the 1990s to encourage purchases.

This deal liberated him from the tiers.

While the top tiered rate for you and me is 37 cents per kilowatt hour, the highest rate is 29 cents for EV TOU households at midday — and it plummets to 16 cents during the “super off-peak” period from midnight to 5 a.m.

A smart guy to begin with, my coffee companion quite rationally sets his pool pump and car charger to start at midnight. Even with the extra consumption to power his car, his bill has dropped by the equivalent of an auto loan payment or more.

It’s a free car, and some free “gas” to boot.

My coffee companion knows another rich guy, with a 14,000 square-foot house, whose bill dropped enough to buy a free Tesla Model S, which goes for $70,000 and up. The company offers easy payments of $980 a month.

These stories are plausible in substance, if rarer in degree, says Lee Krevat, director of smart grid and clean transportation for San Diego Gas & Electric Co. The utility has 2,000 residential customers on the EV TOU rates, a figure that’s growing by 100 to 150 a month.

“People who have a lot of their usage at Tier 3 and 4, they could see their bill go down and have free gas at the same time,” Krevat said.

Without question, it’s good for everybody when consumers shift usage to off-peak periods. If enough did so, SDG&E could avoid huge investments in new infrastructure, which are socialized across the entire customer base.

Yet few people bother to adopt time-of-use rates, which have been available for years, although at lower discounts than those available to electric car owners.

Only half of the state’s 40,000 electric car owners use TOU rates, because they work from home and can’t shift usage easily, or they simply don’t understand the benefits, says Mike Ferry, transportation manager for the California Center for Sustainable Energy. He estimates that state EV owners forego $500,000 a month in savings.

SDG&E may soon promote TOU rates for the great unwashed who remain harnessed to combustion engines.

State regulators are poised to eliminate the dreaded tiers, which are plainly punitive but also have encouraged conservation. The EV advantage may fade away.

In the meantime, you certainly don’t have to be rich or an energy hog to buy an electric car, although it sure doesn’t hurt. There is a long list of more transparent subsidies.

California gives up to $2,500 as credit toward an electric car purchase, down from $5,000 in early 2011. Federal tax credits offset up to $7,500 from the sticker price.

The Volt, Tesla and Nissan Leaf get the maximum subsidies because their batteries are biggest, while the dole declines for plug-in hybrids and smaller EVs. SDG&E customers can also get $2,000 toward the cost of a car charger.

Then there are the hidden subsidies.

For example, Telsa earned $154.4 million in the first half of this year by selling “zero-emission” credits to other carmakers under federal quotas that penalize those without electric cars in their fleets.

And Tesla pays no California taxes on purchases of up to $612 million in manufacturing equipment at its Fremont plant. It recently repaid a $439.6 million loan from the federal government.

Perhaps our leaders are correct, and such largesse is necessary to start an industry.

Neither did Henry Ford to build the auto industry in the early 1900s. Musk resembles Ford in his engineering brilliance and drive to reduce costs, both at Tesla and SpaceX, his successful and heavily subsidized rocket company.

Maybe Musk would have started Tesla and SpaceX anyway. I tried to ask him, but a spokesman said Musk wasn’t available to comment.

Whether government help for electric cars will in fact save the planet is anyone’s guess.

Making lithium batteries takes lots of carbon. Most power is produced by fossil fuel, particularly in San Diego since the San Onofre nuclear plant shut down. And combustion engines are rapidly becoming more efficient.

A thrifty Nissan Leaf would cut carbon emissions by just 20 percent in green-powered Europe compared to diesel, and that’s only if it was driven 90,000 miles over its life span, according to a recent study in the Journal of Industrial Ecology.

Because of limited range, most people don't rack up as many miles each year in EVs as those with conventional cars. In the U.S., today’s electric cars probably break even with gasoline in life-cycle carbon emissions. And the Tesla, with its huge batteries and high power output, might lose the carbon trade-off with a diesel Audi sedan.

Don’t get me wrong: I happily take any government subsidy that comes my way, including the mortgage interest deduction, energy retrofit credits and other goodies. And I think electric cars are totally cool, especially the Tesla Model S.

But apparently my history of saving energy has cut my incentives to save the planet, at least in the view of California’s policymakers.